Smoke alarm firm Sprue lights up the markets with record interims

COVENTRY-based Sprue Aegis, one of Europe’s leading home safety products suppliers, has announced a record half year with revenue and profits both hitting new highs.

Strong sales, especially in France and Germany, have helped to boost performance and the company has said it remains on track to deliver record full year results in line with market expectations.

The company, which designs and sells innovative market leading smoke and carbon monoxide alarms, completed its move to the Alternative Investment Market in April. At the same time, in order to strengthen the company’s balance sheet and provide working capital for expansion, £8m of new equity was placed with institutional investors at £2 per share. Cash at the half year was £11.7m with no debt in the business.

Graham Whitworth, chairman and group CEO, said:  “We are pleased to report another half year of record sales up 11.2% to £23.8m and record profit from operations up 24.5% to £2.7m.  

“Total sales were broadly in line with management expectations and were underpinned by the outperformance of Germany and France partially offset by a slower sales performance in UK Retail caused by customer inventory reduction initiatives and reduced level of CO awareness campaigns and promotions generally.   UK Trade sales were 19% ahead of the same period last year and the Trade business unit is well placed to capitalise from the imminent launch of a brand new range of products designed specifically for the UK Trade sector.”
 
He added that the company’s order book was also at record levels, extending out to 2015. This had been helped in particular by strong demand for its smoke alarm products in France ahead of the introduction of new legislation in March 2015 which requires all domestic properties in France to fit at least one working smoke alarm.  
 
He warned barriers to entry to market remained high with extensive certification testing required before products could be sold.  However, he said the company had directed considerable resources into product development, from which it was yet to fully realise its investment.  

“Our current product pipeline of new products has never been so strong and we have a number of key new products that will be launched over the next 12 months which will significantly enhance our competitive position, particularly in UK Trade.  We are also pleased that the miniaturised version of our CO sensor, Nano-905 has passed final testing and can be fitted into finished products later this year,” added Whitworth.
 
A new ‘connected home’ trial which is due to start shortly will allow the firm to connect and remotely monitor its wireless smoke and CO products over the internet.  It said the market potential of Sprue’s connected home product offering looked “highly promising” although the market is still in its infancy.
 
The board has declared a maiden interim dividend of 2p per share payable on October 30, 2014 to shareholders on the register on October 10.

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